Musk's X Reaches Tentative Settlement with Former Twitter Employees Over $500 Million Lawsuit

Elon Musk's company, formerly known as Twitter, has reached a tentative agreement with ex-employees who sued for $500 million in severance pay. This development was revealed in a court filing on Wednesday, requesting the postponement of a scheduled hearing on 17 September. The San Francisco federal appeals court agreed to delay the hearing, allowing both parties to finalise the settlement.

The lawsuit was initiated by former Twitter employees Courtney McMillan and Ronald Cooper. They claimed that the company did not pay them and other dismissed workers the severance they were entitled to. The terms of this settlement have not been disclosed publicly.

Elon Musk's Workforce Reduction Strategy

In 2022, Musk took control of the social media platform and significantly reduced its workforce. Entire teams focused on trust and safety, human rights, and accessibility for people with disabilities were eliminated. This approach mirrored his strategy at President Donald Trump's Department of Government Efficiency (DOGE), where tens of thousands of federal workers were cut earlier this year.

Other legal actions are still ongoing, including one involving Twitter executives such as former CEO Parag Agrawal. These lawsuits highlight the extensive legal challenges Musk faces following his acquisition of Twitter.

Legal Battles and Federal Downsizing

Musk's prolonged legal disputes with over 2,000 former Twitter employees foreshadowed the current legal battles faced by the Trump administration over federal downsizing. Although the circumstances differ, both situations involve significant workforce reductions and subsequent legal challenges.

An email titled "Fork in the Road" was sent to federal workers offering a "deferred resignation offer," promising pay through September without requiring work. This mirrored a similar email Musk sent to Twitter employees in 2022.

The ongoing legal issues underscore the complexities involved in large-scale workforce reductions, both in private companies like Twitter and within government departments. As these cases unfold, they continue to attract significant attention.

With inputs from PTI